The Body Shop, the nearly 50-year-old cosmetics company known for its ethical hair and skin products, is near bankruptcy in Britain after poor Christmas trading, media reports.
Sky News reported on Sunday that German private equity firm Aurelius, which only bought The Body Shop in November, is entering administration – a British process in which financial experts are brought in to try to save parts of a company.
It says this would result in store closures and job losses for The Body Shop, which was founded in 1976 by Anita Roddick but has been under several owners since she sold it to French cosmetics giant L'Oréal in 2006.
The Body Shop has around 200 stores in Britain, or around seven percent of the global total of around 3,000 stores in more than 70 countries.
The company employs approximately 10,000 people directly, with a further 12,000 employed through franchises.
The Body Shop and Aurelius had not yet commented on the weekend news.
Since the acquisition, Aurelius has already sold The Body Shop's operations in most of mainland Europe and parts of Asia to an unnamed buyer.
“Administration means protecting the company from compulsory liquidation and providing legal protection against the claims of creditors,” says Susannah Streeter, head of money and markets at Hargreaves Lansdown.
“It will give Aurelius breathing space to restructure and close significantly underperforming stores and refocus on e-commerce sales. Whatever the outcome, it seems likely that many stores will close for good.”
Roddick, who died of a brain hemorrhage in 2007, had quickly expanded the company from humble beginnings with a determination to offer products that had not been tested on animals.
She also wanted to make her business environmentally friendly, encouraging customers to bring back empty containers for refilling at the original store in Brighton, on the south coast of England.
Brazil's Natura Cosmeticos, which had bought The Body Shop from L'Oréal, sold it to Aurelius late last year for £207 million, far less than the previous owners had paid.
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